Achieving a more complete understanding of the molecular mechanisms involved in the construction and repair of neural circuits during development and after damage will facilitate efforts to ameliorate the effects of developmental disorders, neurodegenerative diseases, and injuries. Phosphotyrosine signaling controls many aspects of neural development and plasticity. Receptor-linked protein-tyrosine phosphatases (RPTPs), a family of transmembrane cell surface receptors that link cell-cell interactions to the control of tyrosine phosphorylation at the plasma membrane, are essential for formation and maintenance of neural circuits in both vertebrates and invertebrates. Despite the importance of RPTPs in control of neural development, plasticity, and repair, the signaling networks within which they function are not well understood. The objectives of the present application are to establish the developmental functions and mechanisms of interactions between four Drosophila RPTPs (Ptp10D, Lar, Ptp69D, and Ptp99A) and their ligands and coreceptors. We identified sixteen candidate ligand/coreceptors for these RPTPs using a technically innovative screening approach. Each RPTP and all of the candidate ligands/coreceptors have human orthologs or relatives. The rationale for the proposed research is that analysis of RPTP signaling during Drosophila development is likely to provide information that will be relevant to an understanding of how phosphotyrosine signaling controls assembly and repair of the human nervous system. The first specific aim of this application is to define the mechanisms through which interactions between neuronal Ptp10D and a glial ligand, Stranded at second (Sas), control glial cell fate and glial proliferation. Upregulation of Sas signaling causes relocalization of glial transcription factors from the nucleus to the cell border. We hypothesize that binding of Sas to PTB and SH2 domain proteins regulates signaling pathways relevant to glial fate. The second specific aim has two sub-aims. The first is to characterize in vivo ligands and coreceptors for all four RPTPs. The objectives of this aim are to examine the 15 other ligands/coreceptor candidates identified in our screens, and define those that directly interact with RPTPs in vitro. We will also examine the evolutionary conservation of these interactions by testing human orthologs of an RPTP and its candidate ligand for binding to each other. The second sub-aim is to analyze the developmental function of the interactions between Lar and the cell adhesion molecule Sns, which we have validated as a genuine Lar binding protein. The expected outcome of the proposed research will be the definition of a new set of in vivo RPTP ligands and coreceptors and the generation of insights into their developmental roles. This contribution is significant because it will representa major increase in our understanding of RPTP function in the nervous system, and is also likely to provide important information about glial-neuronal communication during development and repair.